Pankaj Mahajan vs Edelweiss Asset Reconstruction Asset ...

[Arising out of the Order dated 16.07.2025, passed by the 'Adjudicating Authority' (National Company Law Tribunal, Mumbai Bench) in CP(IB) No. 3143/MB/2019)]

IN THE MATTER OF: Pankaj Mahajan (IBBI Registration No. IBBI/IPA-001/IP- P00836/2017-2018/11420) Resolution Professional of Arshiya Limited), Having office at: H-223, 22nd Floor, DLF Capital Greens, 15 Shivaji Marg, New Delhi, National Capital Territory of Delhi, 110015 ...Appellant

Versus

1. Edelweiss Asset Reconstruction Asset Company (lead CoC member holding 79.00% voting share) Edelwiess House, Windsor Ln, Kolivery Village, MMRDA Area, Kalina, Santacruz East, Mumbai 400 098 ...Respondent No.1

2. Punjab National Bank (CoC member holding 5.34% voting share) Zonal Sastra Centre-Mumbai Pragati Tower, 1st Floor, G-Block, BKC, Bandra (East) Mumbai-400051 ...Respondent No.2

3. Bank of India (CoC member holding 4.98% voting share) Specialised Asset Recovery Management Branch, BOI Building, Mezannine Floor, 70-80, MG Road, Fort, Mumbai - 400001 ...Respondent No.3

4. Union Bank of India (CoC member holding 2.61% voting share) Stressed Assets Management Branch, Mumbai Ground Floor, 104, Bharat House, M.S. Marg, Fort, Mumbai 400 023 ...Respondent No.4 5. Karur Vysya Bank (CoC member holding 1.03% voting share) The Karur Vysya Bank Ltd Asset Recovery Branch, Shop No. 12; and 13, Diamond Mansion, Dr. Viegas Street, Kalbadevi Main Road, Kalbadevi, Mumbai, Maharashtra - 400 002 ...Respondent No.5

6. CFM Asset Reconstruction Private Limited (CoC member holding 0.66% voting share) 1st Floor, Wakefield house, Sprott Road, Ballard Estate, Mumbai 400 038, India ...Respondent No.6

7. Axis Bank Limited (CoC member holding 0.37% voting share) Stressed Assets Department, 7th Floor, "Axis House", C-2, Wadia International Centre, Bombay Dyeing Compund, P.B. Marg, Worli, Mumbai - 400 025 ...Respondent No.7

8. M/s SREI Equipment Finance Limited (CoC member holding 0.09% voting share) Plot No. Y-10, Block EP, Sector V, Salt Lake City Kolkata-700091 ...Respondent No.8

9. NCR Rail Infrastructure Limited, (undergoing CIRP vide Order dated 07.03.2024) 205 & 206 (Part), 2nd Floor, Ceejay House, F-Block, Shiv Sagar Estate, Dr. Annie Besant Road, Worli, Mumbai - 400 018 ...Respondent No.9

10. Arshiya Northern FTZ Ltd. (ANFL) (undergoing CIRP vie Order dated 14.11.2022) 205 & 206 (Part), 2nd Floor, Ceejay House, F-Block, Shiv Sagar Estate, Dr. Annie Besant Road, Worli, Mumbai - 400 018 ...Respondent No.10

11. IDFC First Bank Limited ("IDFC") (CoC member holding 2.21% voting share) "IDFC First Bank Vigyor Towers, C-62, G Block, Bandra Kurla Complex, Bandra East, Mumbai - 400 051 ...Respondent No.11 Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 2 of 45 12. State Bank of India("SBI") (CoC member holding 3.71% voting share) "Stressed Assets Management Branch - III SAMB-III Branch, Tulsiani Chambers, 1st Floor, Free Press Journal Marg, Nariman Point, Mumbai - 400005 ...Respondent No.12

Present: For Appellant : Mr. Abhijeet Sinha, Sr. Advocate with Mr. Ayush Rajani and Ms. Heena Kochar, Advocates

For Respondent : Mr. Arvind Nayyar, Sr. Advocate with Mr. Vivek Jain, Mr. Swapnil Srivastava, Mr. Abhishek Gupta, Mr. Chirag Naik, Mr. Jayesh Srivastava, Mr. Rishabh Periwal, Mr. Shubham and Ms. Diksha Dadu, Advocates.

Mr. Arun Kathpalia, Sr. Advocate with Ms. Misha, Ms. Mahima Sareen, Mr. Abhilash Chaudhary and Ms. Sanjukta Fauzdar and Ms. Diksha Gupta Advocates for R1-R8, R-11 and R-12 CoC.

With Company Appeal (AT) (Insolvency) No. 1451 of 2025 & I.A. No. 5647 of 2025

IN THE MATTER OF: Bhuvan Madan (IBBI Registration No. IBBI/IPA-001/IP- P01004/2017-18/11655) Resolution professional of Arshiya northern ftwz limited), having office at, CGH 212, DLF Capital Green, Moti Nagar, Delhi - 110015 ...Appellant

Versus

1. Edelweiss Asset Reconstruction Company (Lead CoC member) Edelwiess House, Windsor Ln, Kolivery Village, MMRDA Area, Kalina, Santacruz East, Mumbai - 400 098 ...Respondent No.1

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 3 of 45 2. Punjab National Bank (Common CoC member for Appellant and Respondent No. 12) Zonal Sastra Centre-Mumbai Pragati Tower, 1st Floor, ...Respondent No.2 G-Block, BKC, Bandra (East) Mumbai - 400051

3. Bank of India (CoC member of Respondent No. 12) Specialised Asset Recovery Management Branch, BOI Building, Mezannine Floor, 70-80, MG Road, Fort, Mumbai - 400001 ...Respondent No.3

4. Union Bank of India (CoC member of Respondent No. 12) Stressed Assets Management Branch, Mumbai Ground Floor, 104, Bharat House, M.S. Marg, Fort, Mumbai 400 023 ...Respondent No.4

5. Karur Vysya Bank (CoC member of Respondent No. 12) The Karur Vysya Bank Ltd Asset Recovery Branch, Shop No. 12; and 13, Diamond Mansion, Dr. Viegas Street, Kalbadevi Main Road, Kalbadevi, Mumbai, Maharashtra - 400002 ...Respondent No.5

6. CFM Asset Reconstruction Private Limited (CoC member of Respondent No. 12) 1st Floor, Wakefield house, Sprott Road, Ballard Estate, Mumbai 400 038, India ...Respondent No.6

7. Axis Bank Limited (CoC member of Respondent No. 12) Stressed Assets Department, 7th Floor, "Axis House", C-2, Wadia International Centre, Bombay Dyeing Compund, P.B. Marg, Worli, Mumbai - 400 025 ...Respondent No.7

8. M/s SREI Equipment Finance Limited (Common CoC member for Appellant and Respondent No.12. Plot No. Y-10, Block EP, Sector V, Salt Lake City Kolkata - 700091 ...Respondent No.8 Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 4 of 45 9. IDFC First Bank Limited ("IDFC") (Common CoC member for Appellant and Respondent No.12 "IDFC First Bank Vigyor Towers, C-62, G Block, Bandra Kurla Complex, Bandra East, Mumbai - 400 051 ...Respondent No.9

10. State Bank of India("SBI") (Common CoC member for Appellant and Respondent No. 12. "Stressed Assets Management Branch - III SAMB-III Branch, Tulsiani Chambers, 1st Floor, Free Press Journal Marg, Nariman Point, ...Respondent No.10 Mumbai-400005

11. NCR Rail Infrastructure Limited, (undergoing CIRP vide Order dated 07.03.2024) 205 & 206 (Part), 2nd Floor, Ceejay House, F- Block, Shiv Sagar Estate, Dr. Annie Besant Road, Worli, Mumbai - 400018 ...Respondent No.11

12. Arshiya Ltd ("AL") (undergoing CIRP vide Order dated 23.04.2024) having office at, H-223, 22nd Floor, DLF Capital Greens, 15 Shivaji Marg. New Delhi-110015 ...Respondent No.12

Present: For Appellant : Mr. Abhishek Anand, Mr. Karan Kohli and Mr. Palak Kalra, Advocates.

For Respondent : Ms. Misha, Ms. Mahima Sareen, Mr. Abhilash Chaudhary and Ms. Sanyukta Fauzdar, Advocates for R1-R10 CoC.

Mr. Vivek Jain, Mr. Swapnil Srivastava, Mr. Abhishek Gupta, Mr. Chirag Naik, Mr. Jayesh Srivastava, Mr. Rishabh Periwal and Mr. Santosh Kumar, Advocates for Intervenor.

With Company Appeal (AT) (Insolvency) No. 1452 of 2025 & I.A. No. 5650 of 2025

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 5 of 45 IN THE MATTER OF: PANKAJ MAHAJAN (IBBI Registration No. IBBI/IPA-001/IP- P00836/2017-2018/11420) (Formerly Known as "Arshiya Rail Infrastructure Limited"), having office at, H-223, 22nd Floor, DLF Capital Greens, 15 Shivaji Marg, New Delhi, National Capital Territory of Delhi - 110015 ...Appellant

Versus

1. Edelweiss Asset Reconstruction Asset Company (lead CoC member and common CoC member of Appellant and Respondent No.11 Edelwiess House, Windsor Ln, Kolivery Village, MMRDA Area, Kalina, Santacruz East, Mumbai 400 098 ...Respondent No.1

2. Punjab National Bank (CoC member of Respondent No. 11) Zonal Sastra Centre-Mumbai Pragati Tower, 1st Floor, G-Block, BKC, Bandra (East) Mumbai-400051 ...Respondent No.2

3. Bank of India (CoC member of Respondent No. 11) Specialised Asset Recovery Management Branch, BOI Building, Mezannine Floor, 70-80, MG Road, Fort, Mumbai - 400001 ...Respondent No.3

4. State Bank of India("SBI") (CoC member of Respondent No. 11) "Stressed Assets Management Branch - III SAMBIII Branch, Tulsiani Chambers, 1st Floor, Free Press Journal Marg, Nariman Point, Mumbai - 400005 ...Respondent No.4

5. Union Bank of India (Common CoC member of Appellant and Respondent No.11) "Stressed Assets Management Branch, Mumbai Ground Floor, 104, Bharat House, M.S. Marg, Fort, Mumbai - 400 023 ...Respondent No.5

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 6 of 45 6. IDFC First Bank Limited ("IDFC") (CoC member of Respondent No. 11) "IDFC First Bank Vibgyor Towers, C-62, G Block, Bandra Kurla ...Respondent No.6 Complex, Bandra East, Mumbai-400 051

7. Karur Vysya Bank (Common CoC member of Appellant and Respondent No.11 The Karur Vysya Bank Ltd Asset Recovery Branch, Shop No. 12; and 13, Diamond Mansion, Dr. Viegas Street, Kalbadevi Main Road, Kalbadevi, Mumbai, Maharashtra - 400002 ...Respondent No.7

8. CFM Asset Reconstruction Private Limited (CoC member of Respondent No. 11) 1st Floor, Wakefield house, Sprott Road, Ballard Estate, Mumbai 400 038, India ...Respondent No.8

9. 9. Axis Bank Limited (CoC member of Respondent No. 11) Stressed Assets Department, 7th Floor, "Axis House", C-2, Wadia International Centre, Bombay Dyeing Compund, P.B. Marg, Worli, Mumbai - 400025 ...Respondent No.9

10. M/s SREI Equipment Finance Limited (Common CoC member of Appellant and Respondent No.11) Plot No. Y-10, Block EP, Sector V, Salt Lake City, Kolkata-700091 ...Respondent No.10

11. Arshiya Limited, (undergoing CIRP vide Order dated 07.03.2024) 205 & 206 (Part), 2nd Floor, Ceejay House, F-Block, Shiv Sagar Estate, Dr. Annie Besant Road, Worli, Mumbai-400 018 ...Respondent No.11

12. Arshiya Northern FTZ Ltd ("ANFL") (undergoing CIRP vide Order dated 14.11.2022) 205 & 206 (Part), 2nd Floor, Ceejay House, F- Block, Shiv Sagar Estate, Dr. Annie Besant Road, Worli, Mumbai - 400 018 ...Respondent No.12

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 7 of 45 Present: For Appellant : Mr. Abhishek Anand, Mr. Karan Kohli and Mr. Palak Kalra, Advocates

For Respondent : Ms. Misha, Ms. Mahima Sareen, Mr. Abhilash Chaudhary and Ms. Sanyukta F., Advocates for R1- R10 - CoC.

Mr. Vivek Jain, Mr. Swapnil Srivastava, Mr. Abhishek Gupta, Mr. Chirag Naik, Mr. Jayesh Srivastava, Mr. Rishabh Periwal and Mr. Santosh Kumar, Advocates for Intervenor.

JUDGMENT

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)] The present Appeal is filed by the Resolution Professional (hereinafter

referred to as the "Appellant" or "Resolution Professional") of 1Arshiya Limited

(the "Corporate Debtor"), challenging the order dated 16.07.2025 (the "Impugned

Order") passed by the Hon'ble National Company Law Tribunal, Mumbai Bench

(the "NCLT" or "Adjudicating Authority") in IA No. 1927 of 2025 (the "Application")

arising out of CP (IB) No. 3143/MB/2019 (the "Company Petition"). The

Appellant contends that the Adjudicating Authority erred in passing the

Impugned Order by failing to appreciate the provisions of Regulation 29 of the

Insolvency and Bankruptcy Board of India (Corporate Insolvency Resolution

Process) Regulations, 2016 (the "CIRP Regulations").

2. The Committee of Creditors ("COC") members had approved the proposed

"sale" of the non-core assets of Arshiya Limited which is a "Sale of asset outside

1 Arshiya Limited- CIRP initiated vide order dated 23rd April 2024

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 8 of 45 the course of business" of the Appellant with a clear intent of maximisation of

value which would not only enhance the value of the present CIRP process of

Arshiya Limited but would have also had a positive impact on the CIRP process

of other two Corporate Debtors i.e., NCR Rail Infrastructure Limited Respondent

No. 9 (undergoing CIRP process vide order dated 07 March 2024) and also

Arshiya Northern FTWZ Limited Respondent No. 10 (undergoing CIRP vide order

dated 14 November 2022).

3. The appeal essentially disputes the Adjudicating Authority's rejection of

the sale of non-core assets of Arshiya Limited, which was approved by the

Committee of Creditors ("CoC") as a sale of assets outside the course of business,

aimed at maximization of value. This sale was intended not only to enhance the

value of the ongoing Corporate Insolvency Resolution Process (CIRP) of Arshiya

Limited but also to positively impact the CIRP processes of two other Corporate

Debtors, namely 2NCR Rail Infrastructure Limited (Respondent No. 9),

undergoing CIRP by an order dated 07 March 2024, and 3Arshiya Northern FTWZ

Limited (Respondent No. 10), undergoing CIRP by an order dated 14 November

2022.

4. Appellant claims that the Adjudicating Authority indirectly allowed the

Intervention Petition (IBC/66/MB/2025) whilst the Impugned Order records

that the Intervention Petition has been dismissed, however the application i.e.,

2 NCR Rail Infrastructure Limited-undergoing CIRP vide Order dated 07.03.2024 3 Arshiya Northern FTZ Ltd. (ANFL) -undergoing CIRP vide Order dated 14.11.2022

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 9 of 45 IA 1927/2025 which was filed by the Appellant i.e., Resolution Professional for

Arshiya Limited before the Adjudicating Authority was only partly allowed which

was predominantly based on the submissions made by the intervenor.

5. The Appellant argues that the Impugned Order, if upheld, would effectively

reset the CIRP process to its initial stages (Form G stages), which is

impermissible under the Code and was neither sought nor suggested. This would

undermine the commercial wisdom of the CoC members, who have, after

thorough deliberation and documented discussions in various meetings along

with all PRAs, approved the proposed sale as the best way to maximize value.

The Appellant submits that the Impugned Order, by obstructing the sale,

adversely affects the stakeholders' interests of all three involved CIRPs and

defeats the fundamental objective of maximization of value envisaged under the

Insolvency and Bankruptcy Code.

6. Thus, the appeal challenges the correctness of the Impugned Order and

seeks its setting aside, asserting that it goes against the enabling provisions of

the CIRP Regulations and the considered commercial decisions of the CoC.

7. Company Appeal (AT) (Insolvency) No. 1450 of 2025 is filed by the RP

(Pankaj Mahajan) of CD i.e. Arshiya Limited- in which case CIRP was initiated

vide order dated 23rd April 2024 against the impugned order dated 16.07.2025

in IA No. 1927 of 2025 arising out of CP (IB) No. 3143/MB/2019.

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 10 of 45

8. Company Appeal (AT) (Insolvency) No. 1451 of 2025 is filed by the RP

(Bhuvan Madan) of Arshiya Northern FTZ Ltd. (ANFL) [in which case CIRP was

initiated vide order dated 14.11.2022] against the same impugned order as noted

above. The respondent parties are same as in CA (AT) (Insolvency) No. 1450 of

2025, except for change in their ranks.

9. Company Appeal (AT) (Insolvency) No. 1452 of 2025 is filed by the RP

(Pankaj Mahajan) of NCR Rail Infrastructure Limited [undergoing CIRP in which

case CIRP was initiated vide order dated 07.03.2024] against the same impugned

order dated 16.07.2025. The respondent parties are same as in CA (AT)

(Insolvency) No. 1450 of 2025, except for change in their ranks.

10. Since the respondent parties are same and the same order is being

challenged by the three RPs of three CIRP proceedings and on similar grounds,

the APB of CA (AT) (Insolvency) No. 1450 of 2025 is being taken as a lead matter.

The pleadings in other matters have been noted wherever necessary

Submissions of the CD-Arshiya Limited - AL (through its RP - Pankaj Mahajan)

11. The main issue in this appeal relates to the disposal of land parcels of CD

which were permitted to be sold by the Adjudicating Authority with an impugned

order these are noted as below:

a. Land admeasuring 39.56 acres situate at Khurja Uttar Pradesh. This

land parcel is non-contiguous and situated on the site of NCR Rail

Infrastructure Limited (NCR Rail)

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 11 of 45 b. Land admeasuring 2.52 acres (Spine Road) situated at Khurja, Uttar

Pradesh. This land parcel is situated on the site of Arshiya Northern.

12. NCR Rail and ANFL- both undergoing CIRP - are sister concerns of the

Corporate Debtor which is the owner of the above land parcels. Interlocutory

Applications for approval of resolution plans is pending in both CIRPs before the

Adjudicating Authority,

c. NCR Rail Infrastructure Limited- I.A.(IBC)(Plan) No. 87 of 2025;

d. Arshiya Northern FTWZ Limited- I.A.(IBC)(Plan) No. 52 of 2025.

13. The primary business operations of the Corporate Debtor i.e. Arshiya

Limited are carried out at Panvel, Raigad, therefore, the abovementioned land

parcels are a 'non-core' asset of the Corporate Debtor. Therefore, CoC of the CD

was of the opinion that the best value these land parcels can offer to the CD is

the one they will fetch upon being sold.

14. The said land parcels were mortgaged in favour of Edelweiss ARC and SREI

Equipment. Both lenders have assented to the sale of the land parcels, however,

the existence of the mortgage makes the land parcels, 'encumbered' and not

'unencumbered; as is required by Regulation 29 of the CIRP Regulations, 2016.

Therefore, permission of the Hon'ble Adjudicating Authority was required to sell

the land parcels.

15. Pursuant to extensive discussions and multiple arrangements being

explored by the Committee of Creditors of the Corporate Debtor, Interlocutory

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 12 of 45 Application No. 1927 of 2025 was filed by the Appellant herein seeking

permission to sell land admeasuring 39.56 acres to SRA of NCR Rail and spine

road admeasuring 2.52 acres to SRA of ANFL, under Regulation 29 of the CIRP

Regulations, 2016, as per the decision of the CoC in the 8th CoC meeting of the

Corporate Debtor.

16. The subject land parcel in question i.e., 42.08 Acres of land owned by the

Corporate Debtor which is a no-core asset, is scattered and is located at Khurja

District in Uttar Pradesh while the actual core business of the Corporate Debtor

is at Panvel FTWZ, Maharashtra. Hence, it is evident that the isolated land parcel

i.e., 42.08 Acres are assets which are not used in the ordinary course of business

of the Corporate Debtor and the only purpose of approaching the Adjudicating

Authority by the Appellant was because the said asset is encumbered with the

CoC members and major lenders are common in all the three CIRP and the

respective CoC members had also agreed to dispose of the said non-core land

parcel of Corporate Debtor admeasuring 39.56 acres to the Successful

Resolution Applicant ("SRA") of NCR Rail Infrastructure Limited and land parcel

admeasuring 2.52 acres to the Successful Resolution Applicant Arshiya

Northern FTWZ Limited, respectively, since that would be best option for value

maximization as this land parcel can only be utilized by these entities which are

running their business/operations at Khurja district, Uttar Pradesh and own the

surrounding land parcels. While the Adjudicating Authority was pleased to grant

permission to sell the land parcel @ para 27 of the Impugned order, but it has

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 13 of 45 allowed the land parcels to be offered to the PRAs of NCR Rail and ANFL as

opposed to the SRA of NCR Rail and ANFL, as was sought. This, in essence, will

have the effect of reversing the timeline of the CIRP of both entities and lead to

delay in the resolution of insolvency of the all entities.

17. The Intervenor i.e. Mr. Ajay Mittal is the erstwhile Director of the Corporate

Debtor who has no locus in the present proceedings but has been consistently

trying to derail the CIR Processes of all the concerned entities i.e Arshiya Limited,

NCR Rail and ANFL. In keeping with this pattern, he has filed the Intervention

Application in the present Appeals with the sole intention of misleading the

Hon'ble Tribunal. The Intervenor on 29.10.2025 put forth the following

arguments:

e. Sale of land parcels, as proposed by the Appellant, goes against the

spirit of IBC, 2016 and that it does not lead to value maximisation for

the Corporate Debtor.

f. The PRAs of the Corporate Debtor and the other entities were

deliberately kept in the dark about the availability and status of the

land parcels.

18. The Appellant contends that a corporate insolvency resolution process

initiated under the Code primarily aims at (i) keeping a Corporate Debtor as a

going concern and (ii) maximization of the value of assets of such Corporate

Debtor. The sale of assets of a Corporate Debtor during its CIRP is obviously not

a matter of routine but can be allowed in exceptional circumstances and subject

to conditions and compliances. Regulation 29 of the CIRP Regulations permits Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 14 of 45 the sale of unencumbered assets for better realisation / maximisation of the

value of such assets.

19. This Hon'ble Appellate Tribunal in the case of Jet Aircraft Maintenance

Engineers Welfare Association Vs. Shri Ashish Chhawchharia RP for Jet

Airways (India) Ltd, 2022 SCC OnLine NCLAT 278 has also laid down in para

nos. 21, 22, 23, 25 and 28 that a resolution professional is empowered to sell

unencumbered assets of the CD if he is of the opinion that the same is necessary

for better realization of value. The judgment further lays down that even

encumbered assets may be sold by a resolution professional, after taking

necessary approvals from the committee of creditors and thereafter, seeking

sanction from the Adjudicating Authority. There is no bar under the Code and/or

the CIRP Regulations which restrict the sale of any non- core asset of a Corporate

Debtor during its Corporate Insolvency Resolution Process. The restriction

imposed is only against the CD from doing so.

20. Additionally, Appellant-RP contends that the contention of the Intervenor

that an asset of the Corporate Debtor may only be sold through an open auction,

the Appellant contends that the absence of a provision regarding a particular

procedure/subject matter in a body of statute does not automatically imply

prohibition of the same. It merely means that there is a lacuna in the law and

therefore, the present sale, as long as it leads to value maximization and is done

with the requisite permission of the CoC and the Hon'ble Adjudicating Authority.

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 15 of 45

21. The Appellant further contends that the reliance placed by the

Adjudicating Authority on Regulation 33 of the IBBI (Liquidation Process

Regulations), 2016 is completely misplaced not only because the same pertain

to liquidation proceedings and present Corporate Debtor is under CIRP but also

because the words used in the regulation are "shall ordinarily" which indicates

that the mode of sale prescribed is merely directory in nature and is not a

mandate. Regulation 33 is reproduced hereunder:

"33. (1) The liquidator shall ordinarily sell the assets of the corporate

debtor through an auction in the manner specified in Schedule I."

22. The Appellant further contends that out of the 42.08 acres proposed/sought

to be sold, the breakdown, as mentioned above, is as such - Spine Road covering

2.52 acres and the balance 39.56 acres is in and around the major parcel of NCR

Rail. It is pertinent to note that though only 2.52 acres are proposed to be sold

by the Applicant to ANFL/forms the subject matter of the present application,

the entire spine road covers about 6.31 acres of land out of which 2.52 acres

belong to the present CD and the remaining 3.79 acres belong to NCR Rail. It is

submitted that the rationale behind selling 2.52 to ANFL, which is in

concurrence with the commercial wisdom of the CoC, is to avoid any conflict in

the future between two SRAs (of NCR Rail and ANFL) and both of them can

execute mutual right of way resulting in easement rights to both NCR Rail and

ANFL and value maximization for Arshiya Limited/CD. It is also submitted that,

there is no fixed buyer as of now, the final buyer would be decided after AA

approves the resolution plan in respective CD. This rationale was deliberated

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 16 of 45 over at length by the CoC of the Corporate Debtor as well as NCR Rail and ANFL.

23. It is contended that as far as 39.5 acres land is concerned, the same is on

and around railway tracks, non- contiguous, in between the land parcel of NCR

Rail of 129 acres and is currently being used by NCR Rail. No person can reach

the 39.5 acres of the CD without crossing land of NCR Rail and similarly NCR

Rail will not able to access its entire land without crossing 39.5 acres scattered

land parcel highlighted in the layout. It is due to this reason it is crucial for the

PRA of NCR Rail. Considering this reason, it is difficult for any other entity to

ascribe any value to 39.5 acres other than NCR Rail SRA.

24. This rationale was deliberated over at length by the CoC of the Corporate

Debtor as well as NCR Rail and ANFL. Therefore, the decision to sell the said

land parcels as proposed was arrived at in a completely transparent manner,

after multiple rounds of discussions and the value was ascertained only after

appointing 2 registered valuers in accordance with the provision of the

Code/Regulations. The Intervenor has miserably failed to make out any

procedural irregularities in the CoC minutes of the Corporate Debtor and is

merely trying to mislead the Hon'ble Appellate Tribunal.

25. It is also pertinent to note, that the intervenor's primary objection is to the

sale of the spine road of 2.52 acres which, evidently makes the smaller chunk of

the land to be sold and not to the sale of the 39 acres to the SRA of NCR Rail.

This only goes to show that the Intervention Application has been filed by the

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 17 of 45 erstwhile director with no other intention but to put a spoke in the wheel of the

CIRP of the Corporate Debtor.

26. To the contention that the PRAs had no clarity on the status of land parcels

the Appellant claims that the PRAs of all entities were duly informed that the land

parcels would be excluded from the resolution plan process and instead would

be sold through a separate transaction pursuant to approval from the

Adjudicating Authority. Therefore, there has been no procedural impropriety nor

concealment in the process as is been alleged by the Intervenor.

27. Appellant further contends that a Corporate Insolvency Resolution Process

is a creditor centric process and the CoC's commercial wisdom is paramount. The

sale and purchase of the said land parcels have been duly approved by the CoC

members of Arshiya Limited by a voting majority of 85.46% after due deliberation

over the relevant facts and in exercise of their commercial wisdom.

28. Sale of the said land parcels is proposed with the sole intent of accelerating

the CIRP of the Corporate Debtor and structured to ensure value maximization

to the Corporate Debtor. Valuation, ownership of land, location and position of

land and other relevant factors have been considered at length and the most

commercially prudent and value-accretive arrangement has been approved. This

is in line with the intent and purpose of the Code.

29. Further Appellant contends that the proposed sale is lawful as it has all

the preconditions envisaged under Regulation 29 of the CIRP Regulations, 2016

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 18 of 45 and the power of the Resolution Professional to carry out such a sale has also

been reiterated by the Appellate Tribunal in the Jet Airways case.

30. Appellant claims that no allegation of malafides, undervaluation or lack of

transparency has been made out which can be the only grounds for subjecting a

legally compliant and CoC approved sale to heightened scrutiny.

31. Appellant claims that the application of the Regulation 36A(1A) by the

Adjudicating Authority in the Impugned Order is misplaced. The Appellant

submits that the Form G in the present matter was published on 27th September

2024, followed by an addendum on 14th October 2024, however, the insertion of

the Regulation 36A(1A) was only vide notification dated 26th May 2025. It is to

be noted that the said newly inserted Regulation is prospective in nature. When

the CoC took the said decisions during the 7th CoC meeting and followed by the

8th CoC meeting, latter being held on 18th March 2025, the proposed Regulation

36A (1A) was not in existence. Therefore, considering the law prevailing at the

relevant time only Regulation 29 could have been looked into and in view of the

fact that the secured lenders have approved the "sale" and hence, the course of

action decided by the CoC clearly falls within their realm of "commercial

wisdom".

32. Appellant contends that the Intervenor in his submissions has relied on

the case of B.K. Educational Services Private Limited Vs. Parag Gupta and

Associates (2019) 11 SCC 633 has absolutely no bearing on the facts of the

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 19 of 45 present matter as the case pertains to the retrospective applicability of the law of

limitation to IBC, 2016.

33. The Appellant claims that, the Adjudicating Authority, by erroneously

imposing that independent bids be invited from the PRAs of the entities, when

the sale is already Regulation 29 compliant, has created a procedural

requirement that is not found anywhere in the IBC or CIRP Regulations.

34. The Appellant submits the Adjudicating Authority has while imposing the

above condition has failed to consider that the CIRPs of NCR Rail and NFL are

at an advanced stage and resolution plans have been approved by their

respective CoCs. It is submitted that this direction has been given by the

Adjudicating Authority in complete contravention of the settled legal principle

once a resolution plan is approved by the CoC and submitted to the Adjudicating

Authority, it becomes binding and irrevocable as between the CoC and the

Successful Resolution Applicant ("SRA"), and neither party can withdraw from

or modify the plan unilaterally.

35. In view of the above, the Appellant claims that the Impugned Order, to the

extent it interferes with and nullifies the decision of the Committee of Creditors

of the Corporate Debtor for sale of non-core assets under Regulation 29 of the

Insolvency and Bankruptcy Board of India (Insolvency Resolution Process

Regulations)

Submissions of CoC of Arshiya Limited-Corporate Debtor [Respondent Nos. 1-8, 11 and 12]

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 20 of 45

36. CoC informs that the Corporate Debtor, an integrated supply chain and

logistics infrastructure company, was admitted into corporate insolvency

resolution process ("CIR Process") on 23 April 2024. The Subject Parcels are

non-core land assets of the Corporate Debtor situated within a free trade

warehousing zone ("FTWZ") in Khurja admeasuring 42.08 acres. Of the Subject

Parcels: (i) 39.56 acres are interspersed within and adjacent to railway siding

operations of NCR Rail Infrastructure Limited ("NCR Rail"); (ii) and 2.52 acres

form part of a spine road providing sole access to the FTWZ assets of both NCR

Rail and Arshiya Northern FTWZ Limited ("ANFL").

37. NCR Rail and ANFL are wholly owned subsidiaries of the Corporate Debtor

undergoing independent CIR Processes. Pertinently, the CoCs of the Corporate

Debtor, NCR Rail and ANFL share a common majority of lenders. Further, the

respective CoCs of both NCR Rail and ANFL approved resolution plans prior to

the passing of the Impugned Order. The successful resolution of NCR Rail and

ANFL hinges upon securing access to the Subject Parcels. Further, applications

for approval of both resolution plans are currently pending before separate

benches of the Adjudicating Authority.

38. CoC informs us that the Subject Parcels are also partly mortgaged in

favour of Edelweiss Asset Reconstruction Company Limited ("EARCL") and SREI

Equipment Finance Limited ("SREI"). Both EARCL and SREI form part of the

CoCs of all three entities. The CoC of the Corporate Debtor deliberated upon the

treatment of the Subject Parcels in its 7th and 8th meetings and thereafter

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 21 of 45 approved a resolution, with 85.46% voting in favor, for two-part sale ("Subject

Transaction") of: (i) 39.56 acres to NCR Rail, or its successful resolution

applicant ("SRA"), and (ii) 2.52 acres of the spine road to ANFL, or its SRA.

39. Further the minutes of the 7th and 8th meetings record detailed

deliberations leading to the CoC's conclusion that the commercial value of the

Subject Parcels hinges upon their strategic location and seamless integration

with adjoining assets owned by NCR Rail and ANFL. While a resolution for

granting permanent right of way to NCR Rail through execution of a

memorandum of understanding was tabled before the CoC at its 7 th CoC

meeting, the same failed to gather requisite approval. Thus, after due

consideration, the CoC concluded that outright sale rather than grant of limited

right-of-way to the SRAs of both related entities would maximize value, mitigate

risk of future ambiguity and disputes, and ensure that the Subject Parcels are

deployed to their best, most value-accretive use within the unique FTWZ

ecosystem. Further, while passing a resolution vis-à-vis the Subject Transaction

at its 8th meeting, the CoC also decided to commission valuation of the Subject

Parcels through two independent valuers to ensure price discovery.

40. The Appellant filed I.A. No. 1927 of 2025 with the Adjudicating Authority

seeking approval for the Subject Transaction. The Adjudicating Authority, vide

the Impugned Order, while permitting sale in principle, found that the process

employed for price discovery must be transparent and ensure value

maximization. The Ld. Adjudicating Authority then erroneously directed the RPs

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 22 of 45 of NCR Rail and ANFL to invite independent bids from all respective prospective

resolution applicants ("PRAs") for sale of the Subject Parcels.

41. CoC contends that The Subject Transaction ensures price discovery and

value maximization. CoC claims that the Impugned Order suffers from material

infirmities/irregularities inasmuch as, while recognizing that the Subject

Transaction is necessary for the successful resolution of all three entities, it

purports to interfere with the process employed on the erroneous footing that

there is no transparent price discovery and value maximization. However, the

Impugned Order fails to note that the CoC commissioned valuation of the Subject

Parcels from two independent, reputed valuation agencies and no objections

have been levelled against the valuations. In the context of the Corporate Debtor,

the Subject Parcels' value is barely approx. INR 32 Crore as against total

outstanding debt of over INR 6600 Crore. Therefore, in determination of its sole

commercial domain, the CoC has employed a process that ensures transparent

price discovery and maximization of value.

42. CoC also claims that the Adjudicating Authority has exceeded its

jurisdiction in issuing directions that render the CIR Process of the Corporate

Debtor contingent upon the CIR Processes of ANFL and NCR Rail in a manner

that unwinds the CIR Processes of all three entities. CoC claims that the

Impugned Order commits further illegalities in purporting to direct and pass

orders in respect of the CIR Processes of the NCR and ANFL, contrary to its own

finding that both CIR Processes are not within the jurisdiction of the Ld.

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 23 of 45 Adjudicating Authority. Under the Code, each CIR Process is an independent

statutory proceeding and cannot be contingent upon decisions arrived at in the

CIR Processes of other entities. However, the directions requiring the RPs of NCR

Rail and ANFL to advertise and invite independent bids for assets owned by the

Corporate Debtor conflate separate proceedings and impermissibly make the

Corporate Debtor's CIR Process contingent upon the outcomes of parallel CIR

Processes. Thus, the directions contained in the Impugned Order are beyond the

scope of the Ld. Adjudicating Authority's jurisdiction and warrant interference.

43. Furthermore, it is contended that the CIR Processes of NCR Rail and ANFL

are at an advanced stage. After due deliberations, their respective CoCs have

approved resolution plans for both entities. If the Impugned Order is not set

aside, significant time and resources will be expended in inviting independent

bids from PRAs while stalling judicial approval of the resolution plans. Further,

and more significantly, the SRAs for both entities may be disincentivized against

offering competitive bids for the Subject Parcels. Thus, the Impugned Order

threatens to turn the clock back on the CIR Processes of both ANFL and NCR

Rail. Additionally, the CoC of the Corporate Debtor will be forced to recommence

deliberations on treatment of the Subject Parcels despite having already settled

the issue through multiple rounds of voting and negotiations.

44. CoC claims that the commercial context of the FTWZ necessitates the

Subject Transaction for value maximization. An FTWZ is a special category of

SEZ designed as a contiguous, customs-notified logistics precinct and governed

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 24 of 45 by the Special Economic Zones Act, 2002. The Subject Parcels are not stand-

alone landbanks; while 39.56 acres are interspersed within and around NCR

Rail's private freight terminal and rail-linked operations, another 2.52 acres form

part of a 6.31-acre spine road that is the sole access to assets of both NCR Rail

and ANFL. Their commercial utility, regulatory viability, and bankability arise

from contiguity and integration with the adjoining FTWZ assets.

45. CoC claims that fragmented title or severed ownership in this setting will

trigger immediate value leakage. If the Subject Transaction is not executed,

third-party acquirers will inherit integration challenges, face customs/SEZ

alignment issues, and require bilateral access covenants with NCR Rail/ANFL.

This very complexity will translate into depressed bids. Conversely, the Subject

Transaction will preserve the FTWZ's throughput economics. Furthermore, the

Corporate Debtor's operations are centered in Maharashtra; the Subject Parcels

(located in Khurja, Uttar Pradesh) are non-core, disjunct assets of the Corporate

Debtor, that are unlikely to fetch adequate value in any resolution plans

submitted for the Corporate Debtor as a whole. Therefore, the Subject

Transaction ensures value maximization in the CIR Processes of all three

entities.

46. CoC claims that its approval of the Subject Transaction reflects considered

commercial wisdom, warrants deference, and is non-justiciable. The CoC

approved the Subject Transaction after detailed deliberations, considering the

interdependent nature of the Subject Parcels, the operational synergies with NCR

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 25 of 45 Rail and ANFL and the advanced stage of the CIR Processes of the related

entities. The minutes of the 7th and 8th meetings explicitly record these

deliberations, the alternatives considered, and the CoC's collective conclusion

that an outright sale to the group entities (or their SRAs) would maximize

recoveries and avoid future disputes vis-à-vis access and interoperability.

Judicial review of the CoC's decision on matters of commercial wisdom is

impermissible, save to the limited extent necessary to ensure compliance with

the Code and rules and regulations framed thereunder. The functions of the Ld.

Adjudicating Authority are supervisory and limited to jurisdictional and

compliance-based examination; they do not extend to re-appraising commercial

decisions made by the CoC. The CoC's preference for an outright transfer, at fair

value, to entities that will unlock operational synergies is commercially rational,

within the CoC's exclusive domain, and thus non-justiciable. Therefore, the

Impugned Order warrants being set aside inasmuch as it indulges in speculation

vis-à-vis 'better' price discovery through invitation of independent bids.

47. CoC also contends that Regulation 29 does not bar the sale of encumbered

assets in toto. Regulation 29 of the IBBI (Insolvency Resolution Process for

Corporate Persons) Regulations, 2016 ("CIRP Regulations") is designed to protect

secured creditors from prejudicial transfer of encumbered assets without their

knowledge or consent. It permits sale of unencumbered assets "other than in the

ordinary course of business" to ensure that encumbered assets are not

transferred without the knowledge, consent, or appropriate treatment of the

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 26 of 45 charge-holders. However, Regulation 29 does not prohibit a CoC-sanctioned sale

where the relevant secured creditors consent to the sale.

48. In the present case, EARCL and SREI - the sole charge-holders over the

Subject Parcels - form part of the CoC and have expressly consented to the

Subject Transaction. The consent of the secured creditors to the Subject

Transaction is functionally equivalent to a waiver of the prejudice that Regulation

29 guards against. The transfer, therefore, cannot be interdicted on the ground

that the assets are encumbered where the beneficiaries of that encumbrance

have agreed to the route of disposal. The CoC's decision was business-oriented,

consensual and seeks to realize the underlying security at an optimal value by

enabling the parcels to be used by entities best placed to exploit them.

49. CoC claims that Appellate Tribunal in Jet Aircraft Maintenance

Engineers Welfare Association v. Shri Ashish Chhawchharia, RP for Jet

Airways (India) Ltd., (2022) SCC OnLine NCLAT 278, has previously

recognized that encumbered assets can be sold under Regulation 29 upon

relinquishment/consent by the charge-holders during a CIR Process. Therefore,

reading Regulation 29 as a blanket prohibition on the sale of encumbered assets

would invert its purpose and needlessly sacrifice creditor value in a case where

secured creditors themselves supervise and benefit from the transaction.

50. CoC claims that Regulation 36A does not permit invitation of independent

bids for sale of assets owned by separate entities. Regulation 36A(1A) of the CIRP

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 27 of 45 Regulations, which permits invitation of expressions of interest for sale of one or

more assets of a corporate debtor, is wholly inapplicable in the present case.

While the Subject Parcels are assets of the Corporate Debtor, the Impugned

Order contains directions for invitation of bids for the sale of the Subject Parcels

from PRAs for NCR Rail and ANFL. Let alone Regulation 36A(1A), no provision in

the Code allows invitations of bids for sale of assets owned by a separate entity

in the CIR Process of a corporate debtor. Therefore, the Impugned Order is

entirely incongruent with the scheme of the Code and ought to be set aside.

51. Further the CoCs of both NCR Rail Infrastructure Limited -NCR Rail [R9]

and Arshiya Northern FTWZ Limited - ANFL [R10] supports all arguments

advanced and reliefs sought by the Appellant-RP of the CD-Arshiya Limited - AL

and have filed similar arguments.

Submissions of the intervenor-Suspended Director [IA No 5807 of 2025}

52. The intervenor (Ajay Shankarlal Mittal) advanced the following arguments

during the hearing and as per his IA as noted herein after.

53. Mr. Ajay Mittal is the suspended director, personal guarantor, and

shareholder of the Corporate Debtor (CD), Arshiya Limited (AL). The intervenor

has a vital interest in the Corporate Insolvency Resolution Process (CIRP), as any

reduction in the realizable value of the CD's assets increases his residual liability

due to his personal guarantee. The Corporate Debtor is engaged in free trade

warehousing zones (FTWZ) development and operations, with significant assets,

including land parcels and operational warehouses.

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 28 of 45

54. Intervenor has prayed for following reliefs in his I.A. No. 5807 of 2025:

"a. Declare the entire corporate insolvency resolution process and especially challenge process as void ab intitio as the Applicant was illegally ousted from attending the same.

b. Pass an order directing Respondent No. 1 to furnish to the Applicant the complete evaluation matrix pertaining to all resolution plans that were submitted and voted upon by the Committee of Creditors.

c. Pass an order directing Respondent No. 1 to provide the Applicant with the full video recording of all the meetings of the Committee of Creditors, specifically the 34th meeting of the Committee of Creditors, held between 05.12.2024 and 12.12.2024.

d. Pass an order declaring that any and all resolutions passed by the Committee of Creditors in the corporate insolvency resolution process of Arshiya Northern.

FTWZ Ltd., in meetings for which the Applicant was not provided notice or was asked to exit, are null and void.

e. Pass an order directing Respondent No. 1 to circulate afresh the complete and accurate minutes of the 34th meeting of the Committee of Creditors, conducted from 05.12.2024 to 12.12.2024, specifically incorporating the entire bidding process undertaken during the said meeting.

f. Pass an order directing the Respondents to reconsider all resolution plans de novo in a duly convened meeting of the Committee of Creditors, ensuring that the Applicant's comments and inputs on each resolution plan are duly taken into consideration prior to any voting thereon.

g. Pass an order directing the Respondents to furnish a detailed clarification as to why the resolution plan submitted by Athena

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 29 of 45 India Opportunities, despite offering the highest resolution amount, was not approved by the Committee of Creditors.

h. Reject the Application filed by the Respondent No. 1 seeking approval of the plan so approved by the committee of creditors.

i. Pending the hearing and final disposal of the present Application, stay the hearing and disposal of the Application filed by the Respondent No. 1 seeking approval of the plan so approved by the committee of creditors;

j. Replace the Respondent No. 1 as the resolution professional of Arshiya Northern FTWZ Limited and the Respondent No. 8 as the insolvency professional entity appointed to provide support to the Respondent No. 1, for having failed to adhere to the provisions of the Insolvency Bankruptcy Code, 2016 and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

k. Grant ad interim reliefs as against prayer clause (b), (c), (d) and (e).

l. Grant such other necessary reliefs as this Hon'ble Tribunal may deem fit and proper."

55. The intervenor alleges that the Committee of Creditors (CoC) and

Resolution Professional (RP) have conducted the CIRP and asset sales in a

manner prejudicial to value maximization and in favor of preferred bidders,

violating principles of transparency, fairness, and procedural regularity. The RP

and CoC have excluded the intervenor from meaningful participation in CoC

meetings, withholding notice, agenda, and accurate minutes, thereby infringing

his rights under the Insolvency and Bankruptcy Code (IBC) and related

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 30 of 45 regulations. The intervenor contends the sale process of critical assets such as

the 'Subject Land' and 'Spine Road' was irregular, non-transparent, and aimed

at favoring particular resolution applicants at throwaway prices.

56. The RP and CoC failed to conduct a public auction, instead initiating a

private sale to favoured parties, which disregards Regulation 29 of the CIRP

Regulations and the precedent in Jet Aircraft Maintenance Engineers Welfare

Association v. Ashish Chhawchharia, CA (AT) (Ins) No. 628 of 2020, where sale

of encumbered assets is permissible only by public auction, not private sale.

57. The proposal to sell the land at only the minimum of average fair value

undermines the principle of value maximisation, and is tailored to benefit select

resolution applicants rather than serve the interests of the Corporate Debtor or

its stakeholders.

58. The process lacks certainty or assurance to all prospective resolution

applicants, thereby undermining competitive bidding and denying the Corporate

Debtor the opportunity to maximise asset value.

59. There is substantial procedural impropriety, including: exclusion of the

personal guarantor from material meetings; failure to provide notices, agendas,

and accurate minutes; and issuance of doctored or incomplete minutes for CoC

meetings, all in violation of Section 24 of IBC and Regulations 19 and 23 of the

CIRP Regulations.

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 31 of 45

60. The exclusion of the suspended director and personal guarantor from

meaningful participation in CoC meetings and the sale process is against the

Supreme Court's decision in Vijay Kumar Jain v. Standard Chartered Bank,

(2019) 20 SCC 455, which establishes their vital interest and right to be

involved.

61. The chosen process allows collusion and could fuel future disputes

regarding crucial assets (the "Spine Road"), rather than resolving them

transparently through open, competitive bidding.

62. There is a pattern of improper conduct on the part of the RP and CoC,

including facilitating a particular bidder through irregular extensions, exclusion

of stakeholders, and undervaluing assets for the benefit of favoured parties.

63. The integrity of the CIRP is vitiated by fraud, illegality, procedural lapses,

and favouritism--all causing prejudice to the value realisation for the debtor and

exposing the personal guarantor to further liability.

64. The intervenor seeks, inter alia: a declaration that the process is void ab

initio; provision of all relevant CoC minutes and video recordings; a new, fair

bidding process with participation of all interested parties including the

suspended management; and replacement of the RP and the current IPE for their

failure to adhere to the statutory norms and principles of the IBC.

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 32 of 45 Appraisal

65. We have heard the counsel of both sides and also perused the material

placed on record.

66. Before proceeding further, we recapitulate factual matrix noted

hereinafter. The Resolution Professional ("RP") of the CD4 / Appellant filed I.A.

No. 1927 of 2025 in CP (IB) No. 3143/MB/2019 with the AA seeking approval

for the Subject Transaction5 discussed herein. The Corporate Debtor, was

admitted into corporate insolvency resolution process on 23 April 2024. We note

that CD has non-core land assets of the Corporate Debtor situated within a free

trade warehousing zone ("6FTWZ") in Khurja admeasuring 42.08 acres. We also

note that of the 7Subject Parcels: (i) 39.56 acres are interspersed within and

adjacent to railway siding operations of 8NCR Rail Infrastructure Limited ("NCR

Rail"); (ii) and 2.52 acres form part of a spine road providing sole access to the

FTWZ assets of both NCR Rail and 9Arshiya Northern FTWZ Limited ("ANFL").

We also note the Subject Parcels are being used by and for the benefit of NCR

Rail and ANFL, which are wholly owned subsidiaries of the CD undergoing

4 CD is Arshiya Limited - AL

5 Subject Transaction: two-part sale of: (i) 39.56 acres to NCR Rail, or its SRA and (ii) 2.52 acres of the spine road to ANFL or its SRA

6 FTWZ: free trade warehousing zone

7 Subject Parcels: (i) 39.56 acres of land interspersed within and adjacent to railway siding operations of NCR Rail" (ii) and 2.52 acres forming part of a spine road providing sole access to the FTWZ assets of both NCR Rail and ANFL

8 NCR Rail Infrastructure Limited- NCR Rail: Also undergoing CIRP and Resolution Plan under submission to AA

9 Arshiya Northern FTWZ Limited - ANFL: Also undergoing CIRP and Resolution Plan under submission to AA

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 33 of 45 independent CIR Processes. While the CIR Processes of the CD, ANFL and NCR

Rail did not proceed concurrently, the CoCs of the three entities share a common

majority of lenders. Further, the respective CoCs of both NCR Rail and ANFL

approved resolution plans prior to the passing of the Impugned Order.

Applications for approval of both resolution plans are currently pending before

separate benches of the National Company Law Tribunal, Mumbai Bench ("AA"),

where the Subject Parcels have been recognised as essential to their successful

resolution. The CoC of the CD after deliberations, in its 7th and 8th meetings

approved a resolution, with 85.46% voting in favour, for two-part sale ("10Subject

Transaction") of: (i) 39.56 acres to NCR Rail, or its successful resolution

applicant ("SRA"), and (ii) 2.52 acres of the spine road to ANFL, or its SRA.

Furthermore, we note that the Subject Parcels are partly mortgaged in favour of

Edelweiss Asset Reconstruction Company Limited ("EARCL") and SREI

Equipment Finance Limited ("SREI"), both of whom are constituents of the CoCs

of all three entities. The AA, vide the order dated 16 July 2025 ("Impugned

Order") while permitting sale in principle, found that the process employed for

price discovery must be transparent and ensure value maximization. The AA,

thus, directed the RPs of NCR Rail and ANFL to invite independent bids from all

respective prospective resolution applicants ("PRAs") for sale of the Subject

Parcels.

10 Subject Transaction: two-part sale of: (i) 39.56 acres to NCR Rail, or its SRA and (ii) 2.52 acres of the spine road to ANFL or its SRA

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 34 of 45

67. In the above background we need to note the relevant directions of the

Adjudicating Authority which is reproduced herein as below:

"...

25. We are conscious of the fact that the buyer for the proposed land parcels can only be Respondent No. 9 and 10 or its Successful Resolution Applicant for respective parcels of the land, however, the Resolution Process of Respondent No. 9 and 10 as well as that of Corporate Debtor must have contemplated this arrangement since beginning, as approved by the CoC of the Corporate Debtor so that the Prospective Resolution Applicants in all three cases would have been aware of what is available and for what they are bidding for, so that the competitive biddings could have been received in respect of land parcels in question. This would have ensured maximisation of the value of Respondent No. 9 and 10 as well as value of these land parcels, as the Prospective Resolution applicants in those processes shall have clarity on the issues, which were not clear to them while placing their bids for the Resolution of Respondent No. & 10. Since, CIRP process of Respondent No. 9 & 10 is not before us, we can't comment on those processes and our observations herein should not prejudice the independent finding or conclusion of the Adjudicating authority dealing with CIRP process of Respondent No. 9 & 10 or their CoC's further decision in this regard.

26. In view of foregoing, we are of considered view that the Applicant, herein, can proceed with the sale of both the land parcels, however, the process followed for price discovery of those land parcels should be transparent and ensure value maximisation. The present mode of sale does not ensure that. Accordingly, the Applicant ought to take necessary precautions to maximise the value in the hands of Corporate Debtor and must ensure that the Resolution Professionals of Respondent No. 9 and 10 have conveyed the availability of these land parcels for sale to all the Prospective Resolution Applicants and sought the independent bid from each one of them for the land parcels on offer

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 35 of 45 to ensure fair play. Further, the Respondent No. 9 and Respondent No. 10 ought to convey to all the Prospective Resolution Applicants that they shall have to enter into an arrangement by which both of them shall allow the access through their earmarked land parcels to each other so that each one can get free access to their land parcels, as resolved by CoC of the Corporate Debtor. It is made clear that condition stipulating 'the access through their earmarked land parcels to each other' may be waived by the CoC of the Corporate debtor in its wisdom.

27. In view of the foregoing, the Applicant is allowed to offer the land parcels admeasuring 39.56 acres and land parcels admeasuring 2.52 acres belonging to Corporate Debtor to the Prospective Resolution Applicants in the CIRP of Respondent No. 9 and 10 in the manner as stated in Para 25 above.

28. ΙΑ (IB) 1927 of 2025 is partly allowed. IVNP. (B) 66 of 2025 is dismissed for the reasons stated in Para 17. Both the applications are disposed of accordingly."

68. From the above order we note that while on one hand AA holds that the

Resolution Professional of the Corporate Debtor can proceed with the sale of

these land parcels being treated as non-core asset. But based on ratio laid down

in the case of "Jet Airways Maintenance Engineers Welfare Association vs.

Shri Ashish Chhawchharia RP of Jet Airways (India) Ltd. [2020] SCC Online,

NCLAT 278", in subsequent paragraphs AA proceeds to decide that the

competitive bid needs to be undertaken in both the other CIRP and also

concludes in the Impugned Order that the present mode of sale does not ensure

value maximization or transparency despite all the minutes of the CoC meetings,

submissions made by the Appellant and the discussions that were undertaken

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 36 of 45 in the CIRP of the Corporate Debtor, Respondent No. 9 and Respondent No. 10,

respectively.

69. For determining the sustainability of the order of the Adjudicating

Authority we need to answer the following questions:

I. Whether the manner of sale is a commercial decision lying within the exclusive domain of the CoC.

II. Whether the Subject Transaction ensures price discovery and value maximization and whether a public auction is the sole feasible method of price discovery despite commission of valuation by the CoC.

III. Whether the AA exceeded its jurisdiction in issuing directions that render the CIR Process of the CD contingent upon the CIR Processes of ANFL and NCR Rail pending before separate for a.

IV. Whether the commercial context of the Khurja FTWZ necessitates the Subject Transaction for value maximization.

V. Whether the sale of encumbered assets is permitted under Regulation

29.

VI. Whether Regulation 36A(1A) of the CIRP Regulations is inapplicable

70. The above-raised questions are interrelated. To the extent they can be

taken up separately, they are being discussed hereinafter.

71. We first delve into the issue whether the manner of sale is a commercial

decision lying within the exclusive domain of the CoC or not. We note that

the CoC approved the Subject Transaction after detailed deliberations while

considering the interdependent nature of the Subject Parcels, the operational

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 37 of 45 synergies with NCR Rail and ANFL, the advanced stage of the CIR Processes of

the related entities and the small value of the Subject Parcels in comparison to

the total outstanding debt of INR 6600+ Crore. The minutes of the 7th meeting

of the CoC record that solution for granting permanent right of way to NCR Rail

through execution of a memorandum of understanding was tabled before the

CoC but failed to gather requisite approval. At the 8th meeting, after due

consideration, the CoC concluded that outright sale, rather than grant of limited

right-of-way to the SRAs of both related entities, would maximize value, mitigate

risk of future disputes, and ensure that the Subject Parcels are deployed to their

most value-accretive use. We also note that the CoC's preference for an outright

transfer, at fair value, to entities that will unlock operational synergies is

commercially rational, within the CoC's exclusive domain, and thus non-

justiciable. Judicial review of the CoC's decision on matters of commercial

wisdom is impermissible, save to the limited extent necessary to ensure

compliance with the Code and rules and regulations framed thereunder.

Therefore, the Impugned Order can be set aside for speculating for 'better' price

discovery through invitation of independent bids. Adjudicating Authority can not

re-appraise commercial decisions made by the CoC. The CoC's preference for an

outright transfer, at fair value, to entities that will unlock operational synergies

is commercially rational, within the CoC's exclusive domain, and thus non-

justiciable.

72. We note that the Impugned Order, while recognizing that the Subject

Transaction is necessary for the successful resolution of all three entities, gave Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 38 of 45 a finding that there is no transparent price discovery and value maximization in

the process employed by the RP. However, we note that the CoC commissioned

valuation of the Subject Parcels from two independent, reputed valuation

agencies and no objections have been levelled against the valuations. We note

that the CoC has employed a process that ensures transparent price discovery

and maximization of value.

73. We also note that the AA has ignored the fact that the subject land parcel

was the asset of the Corporate Debtor which was proposed to be sold and hence

the interests of stakeholders of the present Corporate Debtor was to be kept in

mind while adjudicating the instant application rather than dealing with what

could have been done in the resolution processes of Respondent No. 9 and

Respondent No. 10 (undergoing CIRP before other benches) and the concept of

value maximisation was to be looked into from the CIRP of the present Corporate

Debtor. Therefore, we answer in the affirmation that CoC's approval of the

subject transaction reflects considered commercial wisdom, warrants deference

and is non-justiciable.

74. We further delve into a related issue whether a public auction is the sole

feasible method of price discovery or not. We note that while recognizing that

the Subject Transaction is necessary for the successful resolution of all three

entities and that NCR Rail and ANFL (or their SRAs) are the only possible

transferees of the Subject Parcels, the Impugned Order interferes with the

manner of sale on the assumption of absence of transparent price discovery and

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 39 of 45 value maximization. Pertinently however, contemporaneous with the approval of

the Subject Transaction, the CoC: (i) commissioned valuation of the Subject

Parcels from two independent, reputed valuation agencies, and; (ii) resolved to

effect sale of the Subject Parcels at a consideration not less than the average of

fair market value - ensuring value maximization and the best price discovery for

the Subject Parcels. CoC has placed its reliance on Binani Industries Limited

v. Bank of Baroda & Anr., judgment dated 14 November 2018 in CA (AT)

(Ins.) No. 82 of 2018 and claims that reliance on principles governing

maximization of value in auction processes holds little weight in light of the

settled position of law that a resolution process under the Code is not a myopic

auction but instead aimed at long-term commercial prospects and overall

resolution of the corporate debtor. We find the argument to be convincing in the

present context. We therefore find that in the facts and circumstances of the case

public auction is not the sole feasible method of price discovery.

75. We also delve into the question whether the AA can issue directions that

renders the CIR Process of the CD contingent upon the CIR Processes of

ANFL and NCR Rail pending before separate fora. We note that the Impugned

Order recognizes that the CIR Processes of NCR Rail and ANFL are pending

before separate benches of the NCLT, Mumbai and thus beyond the jurisdiction

of the Ld. AA. However, contrary to its own finding, the Adjudicating Authority

has directed and passed orders in respect of the CIR Processes of NCR Rail and

ANFL. The directions requiring the RPs of NCR Rail and ANFL to advertise and

invite independent bids for assets owned by the CD conflate independent Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 40 of 45 proceedings under the Code. This in our view renders the CD's CIR Process

contingent upon the outcomes of parallel CIR Processes. Additionally, the CIR

Processes of NCR Rail and ANFL are at an advanced stage wherein their

respective CoCs have approved resolution plans for both entities and are pending

for approval before different benches of NCLT, Mumbai. The CoC also brings to

our notice that by adopting the recourse as in the Impugned Order, more time

and resources will be expended in inviting independent bids from PRAs of NCR

Rail and ANFL. Further judicial approval of the resolution plans will remain

stalled; and the SRAs for both entities may be disincentivized against offering

competitive bids for the Subject Parcels or even continuing to participate in the

resolution efforts. In effect, the value achieved in the CIR Processes NCR Rail

and ANFL may also be lost. We agree with the arguments canvassed by the CoC

and we therefore conclude that such directions makes the CIR Process of the CD

contingent upon CIR Process of ANFL and NCR Rail and thus this direction by

the AA is not sustainable.

76. We now consider another important question whether the commercial

context of the Khurja FTWZ necessitates the Subject Transaction for value

maximization or not. We note that the Subject Parcels are not stand-alone

landbanks; instead, they have always been utilized by NCR Rail and ANFL for

seamless operations in the Khurja Free Trade Warehousing Zone-FTWZ. We note

that an FTWZ is a special category of SEZ governed by the Special Economic

Zones Act, 2002. Therefore, the commercial utility of the Subject Parcels arises

from contiguity and integration with the adjoining FTWZ assets. If the Subject

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 41 of 45 Transaction is not executed, third-party acquirers will inherit integration

challenges, face customs/SEZ alignment issues, and require bilateral access

covenants with NCR Rail/ANFL. Conversely, the Subject Transaction will

preserve the FTWZ's throughput economics. Therefore, the Subject Transaction

ensures value maximization in the CIR Processes of all three entities. Such a

commercial context has to be considered as has been brought before us by the

CoC and by not accounting for this fact, an optimal commercial decision cannot

be arrived at. CoC had taken into consideration the commercial context of Khurja

FTWZ for value maximization and we should defer to their commercial wisdom.

77. Now we delve into the question whether the sale of encumbered assets

is permitted under Regulation 29. Regulation 29 of the IBBI (Insolvency

Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP

Regulations") protects secured creditors from prejudicial transfer of encumbered

assets without their knowledge or consent. It permits sale of unencumbered

assets "other than in the ordinary course of business" to ensure that encumbered

assets are not transferred without the knowledge and consent charge holders.

However, Regulation 29 does not prohibit a CoC sanctioned sale where the

relevant secured creditors have given consent to the sale. In the present case,

EARCL and SREI - the sole charge-holders over the Subject Parcels - form part

of the CoC and have expressly consented to the Subject Transaction. This is

functionally equivalent to a waiver of the prejudice that Regulation 29 guards

against. Therefore, the Subject Transaction cannot be interdicted on the ground

that the assets are encumbered where the beneficiaries of that encumbrance

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 42 of 45 have agreed to the same.

78. This Appellate Tribunal in Jet Aircraft Maintenance Engineers Welfare

Association v. Shri Ashish Chhawchharia, RP for Jet Airways (India) Ltd.,

(2022) SCC OnLine NCLAT 278, had previously recognized that encumbered

assets can be sold under Regulation 29 upon relinquishment/consent by the

charge holders during a CIR Process. We note that Jet Aircraft does not

mandate the conduct of a public auction for the sale of encumbered assets. In

the present case, in view of AA's finding that NCR Rail and ANFL are the only

possible transferees for the Subject Parcel, which has also been admitted by the

Intervenor in its reply to the captioned Appeal, no material circumstances

warrant conduct of a public auction at the risk of derailing the CIRPs of all three

entities. We also note that for an enabling action under Regulation 29 of the CIRP

Regulations, there is no requirement for undertaking any public auction and the

law does not contemplate any such process which is being suggested by the

Adjudicating Authority in the Impugned Order and therefore such directions are

unsustainable.

79. Further, even though the IBBI (Liquidation Process) Regulations, 2016

("Liquidation Regulations") have no application in the present facts. However

contrary to the averments made by the Intervenor, even the Liquidation

Regulations impose no bar upon private sale of assets of the Corporate Debtor.

80. Lastly, we look into the question whether Regulation 36A(1A) of the CIRP

Regulations is inapplicable in the present case or not. We note that

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 43 of 45 Regulation 36A(1A) of the CIRP Regulations, which permits invitation of

expressions of interest for sale of one or more assets of a CD, is wholly

inapplicable in the present case. While the Subject Parcels are assets of the CD,

the Impugned Order contains directions for invitation of bids for the sale of the

Subject Parcels from PRAs of NCR Rail and ANFL. We note that not only

Regulation 36A(1A), but no other provision in the Code allows invitations of bids

for sale of assets owned by a separate entity in the CIR Process of a Corporate

Debtor. Furthermore, Regulation 36A(1A) was only inserted into the CIRP

Regulations vide a notification dated 26 May 2025. However, the Subject

Transaction was approved by the CoC on 18 March 2025 - much prior to the

introduction of Regulation 36A(1A). The concerned provision vests substantive

powers in resolution professionals to invite expressions of interest for the sale of

assets of a Corporate Debtor, which was hitherto not permitted. We also find

that the Intervenor's reliance on B.K. Educational Services (P) Ltd. vs. Parag

Gupta & Associates (supra) is baseless in as much Regulation 36A(1A) is not

merely clarificatory or procedural in nature. Therefore, given that the regulation

did not exist as on the date of approval of the Subject Transaction and is

prospective in import, the issue of compliance with the same does not arise. In

any case, the language employed in Regulation 36A(1A) is not mandatory in

nature and the CoC in exercise of its commercial wisdom may determine the

mode of sale. Therefore, we find that Regulation 36A(1A) of the CIRP Regulations

is not applicable in the facts and the circumstances of the case.

81. We note that Intervenor claims that auction process be attempted at least

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 44 of 45 once as the private arrangement for disposal of the land of the Corporate Debtor

may not be most efficient and alleges to be a rigged arrangement. Intervenor

claims that it is the CD's resolution and it should not envisage the convenience

of NCR Rail - Respondent No.9 and ANFL - Respondent No. 10.

82. Basis above analysis noted earlier herein, we observe that such arguments

of the intervenor indicate dilatory tactics and an attempt to thwart the resolution

process of the Corporate Debtor. In the above background sought by Suspended

Director of CD - AL in his Intervenor Application bearing I.A. No. 5807 of 2025

is not sustainable and we conclude that it can be dismissed basis the analysis

as noted above.

Conclusion and Orders

83. In the above facts and circumstances of the case, we find that the

directions issued by the Adjudicating Authority as noted above are not

sustainable and deserve to be set aside. Accordingly, we allow the sale of assets

as approved by the CoC and as prayed in IA 1927/2025 arising out of CP (IB) No.

3143/MB/2019 before the AA and accordingly the orders of the Adjudicating

Authority are modified. I.A. No. 5807 of 2025 filed in this Appeal is also

dismissed. No orders as to costs.

[Justice Ashok Bhushan] Chairperson

[Arun Baroka] Member (Technical) New Delhi.

November 07, 2025.

pawan

Company Appeal (AT) (Insolvency) No. 1450-1452 of 2025 45 of 45